Tuesday, January 24, 2006

Ford and the American Jobs Creation Act

From Alan Sloan in the Washington Post (via MaxSpeak)
It's almost enough to make you laugh -- bitterly, of course. Here was Ford Motor Co. announcing yesterday that it had cut 10,000 jobs last year and that it will cut up to 30,000 more. But shedding jobs at muscle-car acceleration rates didn't stop Ford from pocketing hundreds of millions of dollars courtesy of the American Jobs Creation Act.

The Act in question encouraged U.S. companies in 2005 to "repatriate" profits made overseas and pay only 5.25 percent tax on them rather than the standard 35 percent. In Ford's case, it saved the company $250 million, but as we can see, did little to "create jobs" in the US.

What's amazing about politicians is that they will pass some piece of legislation under the assumption that it will bring about some goal--such as, creating jobs, stimulating the economy, etc.--but then there is never any follow-through to see if it actually accomplished the stated goal.

I wish politicians could be forced to make falsifiable claims. That is, if they make some kind of claim about the benefits of some policy, they should be forced to make it like a scientific hypothesis: If this or that testable condition does not come to pass within such and such a frame of time, then we will officially consider our policy to be a failure. I know it's not possible to make government into a science, but it should at least be possible to learn from past mistakes.


Anonymous Rich said...

There is one kind of experimentally verifiable hypothesis that all Washington politicians are keen on testing over and over: the one which says "If I do/say X, then Y% of my electorate will be swayed toward me away from my opponent on election day." They then run simulations (polls) trying to refine that hypothesis and if these show that the actual goal of being re-elected is unattainable, will sometimes drop out of the race, thus having made a completely rational decision. Whether statement X has any point of contact with reality or morality is not of concern to them, only to other people.

Also, "job creation" is carried out with the unstated understanding that not all jobs are equal. In fact, the only ones which really and truly matter are the ones whose titles start with the letter C.

11:16 PM  
Blogger Kyle McCullough said...

Daryl said: "politicians will pass some piece of legislation under the assumption that it will bring about some goal".

You use the word "assumption" where you should have used the word "pretense."

For that bill in particular, I do not think any serious thinkers seriously thought that Congress was being serious with the title of the bill. It just sounded better than "The let's give our friends another tax cut" act.

2:12 PM  

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